Now Reading: Indian hotel chains expand upscale brands to capture mid-market premium
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Indian hotel chains expand upscale brands to capture mid-market premium
Indian hotel chains expand upscale brands to capture mid-market premium
Hotel chains including EIH, ITC, and Lemon Tree are expanding into upscale and upper-upscale segments, targeting domestic travellers who spend more than international tourists on stays. The strategy bridges luxury and budget…
Hotel chains including EIH, ITC, and Lemon Tree are expanding into upscale and upper-upscale segments, targeting domestic travellers who spend more than international tourists on stays. The strategy bridges luxury and budget categories, with upscale properties commanding higher room rates than midscale hotels while keeping operating costs below luxury levels.
EIH's Trident brand outpaced industry peers with 13.8% RevPAR growth in the June quarter, compared to 9.2% for the upper-upscale segment and 8.2% for its luxury Oberoi brand. Samhi Hotels expects upscale properties to contribute 60-65% of revenue by 2029, up from 45% now, as it builds more like its planned Noida hotel with Ingka Centres.
Industry data from HVS Anarock shows upscale and upper-upscale hotels accounted for 42% of signed keys in 2025, equal to midscale. Chains are building portfolios across price points to balance demand cycles and capture bigger market share in tier-2, 3, and 4 towns.
Indian Opinion Analysis
Indian hotel chains are responding to a domestic travel boom that has shifted spending patterns since the pandemic. Under the Ministry of Tourism's 2022 hotel classification guidelines, the "upscale" bracket sits between luxury and midscale and is the segment growing fastest in signed inventory. For chains like EIH and Lemon Tree, the bet is that Indian leisure and business travellers, who now outspend foreign tourists in many city markets, will pay a premium for fuller services, larger rooms, multiple dining outlets, without demanding the overhead of a luxury property. The Hotel Association of India estimates that 55% of new room supply over the next three years will be in the upscale and upper-upscale categories. The key date to watch is February 2027, when Lemon Tree's Fleur properties should begin contributing revenue, signalling whether the strategy has taken hold beyond the current pipeline.
Source: livemint.com
This brief was synthesised by AI from the source linked above.
